Shine Corporation purchased 20 percent of the common stock of Ash Corporation on January 1, 2002, at $28,000 in excess of underlying book value. The excess is attributable to equipment with a remaining useful life of 2 years.

At 01/01/2002, 01/01/2003, 01/01/2004, 12/31/2004, the fair values of Shines investment in Ash are $1,000,000, $1,100,000, $1,080,000, $1,200,000 respectively.

The companies reported the following operating results and dividends for the three years following the date of purchase:

	Shine Operating Income	Shine Dividends	Ash Net Income	Ash Dividends
2002	1,000,000	130,000	400,000	40,000
2003	960,000	140,000	300,000	40,000
2004	1,200,000	140,000	500,000	22,000

a.) Compute the net income reported by Shine for each of the three years assuming Shine accounts for its investment in Ash using the fair value method.

2002:

2003:

2004:

(b.) Compute the net income reported by Shine for each of the three years assuming Shine accounts for its investment in Ash using the equity method.

2002:

2003:

2004: